Donald Trump's Capital Gains Play: Hypocrisy Or Campaign Genius?

Posted by Political Quarterback17pc on August 24, 2015

When Mitt Romney's effective tax rate was released in 2012, people were shocked. The Republican nominee for president made $13.7 million in 2011, but he only paid an effective tax rate of 14.1 percent. And just one year earlier, the average American household paid a higher rate than the ultrawealthy Romney at 18.1 percent.

Over the weekend, in was a peculiar step for a Republican, presidential front-runner Donald Trump, who isn't exactly shy about his wealth, issued a press release exclaiming in all capital letters that he was worth $10 billion. He said he wanted to eliminate the capital gains loophole that has been used to help rich people like Romney snag low tax rates. The top percentage tax rate for capital gains is 20 percent, compared to 40 percent for top ordinary income.

"The hedge fund guys didn't build this country. These are guys that shift paper around and they get lucky," Trump said. "It's the wrong thing. These guys are getting away with murder. I want to lower the rates for the middle class."

But what exactly would Trump's capital gains play mean for his own massive piles of cash? Does he benefit from such tax loopholes, and if he does, does that matter for his campaign?

"This is populist gold on the campaign trail. He's trying to pull in as many populist voters in the Republican party as possible. This way, he gets to have a discussion about this as well and make a point that 'Oh, yeah, I can't be bought,' " said Ford O'Connell, a Republican strategist who worked on Republican John McCain's presidential campaign in 2008.

"He defies political gravity at every turn," O'Connell said. "At this stage, I don't see the risk for him in it right now. Obviously somebody could try to use it against him, but right now everything ricochets off of him."